Managing dayworks is a time consuming reality for most civil contractors, whether you’re delivering entire projects on day rates or just variation works. Not only does dayworks management consume a lot of time, there is also a high risk of missing revenue and disputes with your client.
In this article, we will review some principles around dayworks and best practices to ensure smooth and efficient operations without missing any claimable items.
Where and why dayworks are used
There are a variety of situations where it makes sense to use dayworks:
- As a sub-contractor to a head contractor who is responsible for time and budget. In this case, the head contractor bears the risk of cost overruns. While this typically results in lower margins, it also has lower risk and need for management overhead.
- For variation works. For out of scope works on a variation, it is often easier for both parties to complete works on agreed dayworks rates.
- For emergency works. In the case of emergency works (eg, burst water pipes in roads, road collapse, repairs after road accident, etc) there is no time to prepare a priced quote.
- For small jobs. In these cases, the effort of quoting is not justified, and dayworks makes sense to both parties. This is often the case with panel agreements for maintenance works.
Before undertaking dayworks
As a company, you may have a preference for dayworks (lower risk and management overhead) or priced work (higher margins). In both cases it makes sense to be ready for dayworks – you will likely need to do some dayworks on priced jobs, and dayworks can help fill gaps between jobs.
If you just think about dayworks when they are needed, you will likely run into some issues. Some simple steps you can take in advance of completing dayworks.
- Calculate your costs for completing works on day rates, and target margins. You will need to price for each contract and consider factors such as market rates and how much you want the work, but this work will allow you to respond much faster.
- Have a mechanism for recording dayworks. This can be either a paper-based or digital system.
- Train your employees. Ensure that they understand how important it is to complete their dayworks dockets in a timely manner and get them approved and back to the office.
- Ensure effective internal workflows: if you don’t have effective workflows the risk of missing claimable dayworks is high. Some things to consider:
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- Review of contract to ensure all of your costs are covered in the rates and that you understand client requirements for approval and payment
- Ensuring dockets get back to the office. If you are using digital dockets, these will be accessible in real-time. If using paper dockets ensure that these are sent to the office at a frequency that is suitable for your business.
- Tracking dockets to ensure that everything is claimed. This can be done by comparing dockets to submitted timesheets and site diaries
- Have a streamlined system for processing dockets, applying your day rates and creating claims in a format that allows your customers to verify against submitted claims. This can be done with a specialised dayworks management system or in an Excel spreadsheet
Day-to-day dayworks management
While dayworks in many ways are simpler to manage than priced works, they add some complexity with record keeping that must be managed by your site team. The following tips can help with the day-to-day:
- If possible, have your site supervisor complete a dayworks docket for the entire crew. This reduces the number of dockets and reliance on individual operators to complete dockets correctly.
- Ensure that the client representative and your site crew are on the same page about how and when dockets will be approved (eg, will client rep approve day of works, next day or approve weekly in batch, will they approve on site or by email?)
- Most important of all is to build the habit of completing dayworks dockets as works are completed. If your crew are not accustomed to doing dayworks, this will require vigilance and regular reminders early on. Don’t fall into the trap after a few weeks of assuming that the new habit is embedded – in reality this will likely take months!
Turning dayworks into money in your bank account
Ultimately what matters for you is money in your bank account. The more organised you are with your dayworks, and the easier it is for your customer to verify that they have been approved by their representative, the faster you can get paid.
Some tips for this:
- Keep all of your daywork dockets well organised
- Ensure you have a robust system to minimise human error when calculating your claim
- Present your claim in a way that your client can easily check any daywork item against the original signed docket
- Submit your dayworks claim on time and ensure it meets all of the requirements stipulated by your client
Following these steps will ultimately reduce your costs and maximise revenues, as well as present you to your clients as a professional and organised partner to them. All of these can be done using tools like Excel that you are already using if you invest the time and are diligent on a daily basis. If you don’t have the time to do this, or struggle with keeping everything organised, get in touch to discuss how Varicon can help with your dayworks.
You can also use our free Construction Daywork Docket Template.